In a dramatic turn of events, the eleventh-hour attempt to rescue the struggling retail chain Wilko has dissolved into a bitter feud, with accusations and disputes swirling around the deal. Robert Mantse, the chairman of Anglo-Canadian private equity firm M2 Capital, found his bid to salvage Wilko unraveling just moments before the crucial negotiations.
Simon Arora, a seasoned retail expert who formerly served as the chief executive of B&M Bargain Retail, entered the fray with unexpected “unsolicited advice” for Mantse. Arora expressed astonishment at Mantse’s interest in Wilko and highlighted several unexplored challenges. Arora, recognized for transforming B&M from a regional chain into a nationwide retail giant, questioned the rationale behind Mantse’s move into discount retail, considering his background primarily in metals and mining, particularly in Russia.
Arora cautioned that securing sufficient stock from Chinese suppliers, especially those already owed money by Wilko before its administration, would be a daunting task. He stressed that Chinese suppliers might not be receptive to dealings with a new company, emphasizing the potential obstacles facing M2 Capital’s bid.
Mantse, bewildered by this unsolicited interference, sought assistance from PricewaterhouseCoopers (PwC), the administrators overseeing Wilko’s administration, to determine how Arora had accessed his email.
Less than 24 hours later, Mantse’s rescue bid was abruptly terminated. PwC communicated to Mantse that negotiations could not proceed without concrete proof of funding, effectively sealing the fate of the bid and initiating a wave of layoffs within Wilko.
This abrupt collapse marked the latest chapter in a saga characterized by bitter internal disputes, focusing largely on M2 Capital’s bid. Mantse accused PwC of conducting an unfair and opaque sales process for Wilko, while PwC raised questions regarding the source of Mantse’s funds.
In response to inquiries regarding his interest in Wilko, Mantse cited a desire to preserve the 12,500 jobs at stake and an ambitious plan to increase the company’s revenues by 100% within two years.
Wilko, a chain comprising 400 stores, fell into administration on August 10. PwC set stringent deadlines for prospective bidders due to financial constraints.
M2 Capital’s unexpected entry into the bidding process surprised many industry observers, given its lack of experience in the retail sector and relatively low profile. Mantse offered approximately £90 million in a bid to save the entire chain, claiming the backing of an unnamed billionaire.
M2 Capital’s interest garnered enthusiastic support from the GMB union, representing around 4,000 Wilko employees, who saw the bid as a potential lifeline for their members.
However, as relations between M2 Capital and PwC soured, hopes for a comprehensive rescue of Wilko faded. Mantse accused PwC of imposing additional criteria to impede M2 Capital’s participation in the bidding process, lamenting the tight deadlines and administrative obstacles.
Reports suggested that U.S. property tycoon Michael Flacks might support M2 Capital’s bid, potentially strengthening its position. However, Flacks denied any involvement and signaled a lack of long-term interest in Wilko.
Ultimately, M2 Capital’s bid crumbled as PwC declined to grant more time for proof of financing, leading to the initiation of redundancies at Wilko. The prospect of a complete rescue now seems bleak.
Amidst this turmoil, there remains a glimmer of hope that Doug Putman, the Canadian owner of HMV, may save some Wilko jobs with his bid, which is still under consideration by PwC.
In the interim, Wilko employees are grappling with uncertainty, as the administration process threatens to spiral into chaos. PwC maintains its commitment to conducting a transparent sales process and securing the best outcome for creditors while preserving as many jobs as possible.
